Swiss Manufacturing Industry withstands increased global competition
Deloitte report on the current challenges faced by Swiss MEM industries
Zurich, 19. February 2012
In 2008, the manufacturing industry in Switzerland was challenged by the global financial crisis and is today faced with global competition, the strength of the Swiss franc and pressure to innovate. Deloitte conducted an analysis of the challenges and prospects of the manufacturing industry in Switzerland and published the results in a “White Paper on the Swiss Manufacturing Industry – Challenges and Prospects in Global Competition”, which is now available in English.
Deloitte has conducted an analysis of the challenges and prospects of the industrial sector in Switzerland, focusing on mechanical engineering, electrical engineering and metalworking (MEM) industries. The analysis included a survey with leading Swiss MEM companies and interviews with executives and industry experts. The Swiss manufacturing industry has come under increasing pressure in the past few years – due to the uncertain macroeconomic climate, the increasing global competition and the pressure to innovate. New overseas growth markets must open up if globally active companies are to succeed. Despite the current challenges, almost a fifth of the companies surveyed rate their own prospects of success as positive.
Sixty-five percent of MEM companies surveyed regard localisation – adjusting their products to the needs of customers in the new growth markets – as the most important future measure to be taken if they are to be successfully positioned in the global marketplace. Ninety percent of companies expect an increase of production facilities abroad in the next few years and 82% a reduction in domestic production capacity. Ralf Schlaepfer, Manufacturing Industry Leader at Deloitte emphasises: “Outsourcing is not automatically a sign of impending de-industrialisation of existing Swiss facilities but instead results from the expansion of customer-oriented production facilities in the growth markets.”
Around half of MEM companies plan to invest more in research and development in the next few years. However, a stronger focus on overseas markets is also noticeable in this respect: Fifty-five percent of companies surveyed believe that their R&D capacity abroad will increase. Only 35% expect an increase in Switzerland. Markus Koch, Partner at Deloitte Consulting AG: “Switzerland has a long tradition as a research location for the MEM industries. MEM companies value Switzerland as a place for top-class research and keep investing. But customer-oriented innovation on the ground is becoming more important, as is a thorough understanding of customer industries. Innovative, local developments can in turn be sold to the global markets.”
According to the Deloitte Whitepaper, MEM companies in Switzerland still have great potential to strengthen their position against the global competition. Increased productivity (in particular in supply chain management), improved leveraging of growth markets, talent support in the Swiss market and abroad and cost reduction can all play their part. Markus Koch: “There are many growth markets in addition to the BRIC countries in which our companies can further strengthen their presence, such as Turkey, Indonesia and Colombia, to name but a few. Many companies also see potential in Africa as a future market of the next generation.“
Deloitte analysed the current challenges faced by Swiss MEM industries. The analysis is based on a survey of 40 executives from Swiss MEM companies conducted from September to October 2012 and around a dozen personal interviews with CEOs, CFOs and other experts from industry, government and academia. No previous analysis of Switzerland as a location for manufacturing has been conducted on this scale.
The complete results of Deloitte’s “White Paper on the Swiss Manufacturing Industry –Challenges and Prospects in Global Competition” in English can be found here.
Deloitte is a leading accounting and consulting firm in Switzerland and provides industry-specific services in the areas of audit, tax, consulting and corporate finance. With approximately 1,200 employees at six locations in Basel, Berne, Geneva, Lausanne, Lugano and Zurich (headquarters), Deloitte serves companies and institutions of all legal forms and sizes in all industry sectors. Deloitte AG is a subsidiary of Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). DTTL member firms comprise of approximately 193,000 employees in more than 150 countries around the world.
In this press release references to Deloitte are references to Deloitte AG, a subsidiary of Deloitte LLP, which is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.com/ch/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP and its subsidiaries are leading business advisers, providing audit, tax, consulting and corporate finance services through more than 12,600 exceptional people across the UK and Switzerland. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel. Deloitte AG is recognised by the Federal Audit Oversight Authority and the Swiss Financial Market Supervisory Authority. The information contained in this press release is correct at the time of going to press.